Friday, March 1, 2024

Brussels Playbook: Europe first — Breton chases Bulgarian ammo for Ukraine — Selmayr’s next move

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COMING TO YOUR BACKYARD: Solar panels, windmills, green hydrogen and heat pumps are some of the technologies that will soon benefit from simplified permits to overcome red tape and lengthy fights with NIMBYs. That’s if EU countries and the European Parliament endorse the Net Zero Industry Act to boost Europe’s clean tech industry, which European Commission President Ursula von der Leyen will present today. “It’s all about speed, speed and facilitation,” she said Wednesday.

Europe first: The act, drafted in record-time, is also about countering China’s and America’s green tech subsidies, which the EU fears will lure manufacturing away from the Continent. To counter that threat, the draft law sets targets for local production in the EU for 2030, and urges countries to use a set of policies, from permitting to subsidies and procurement, to meet them.

On procurement, the law avoids openly protectionist provisions such as Washington’s “Buy American” rules, but it does introduce new requirements for public authorities to consider “security of supply” in their public tenders.

Nuclear’s half in: France fought hard for nuclear power plants to be included in the list of strategic net-zero technologies that benefit from ultra-simplified permitting — but mostly lost that battle. While a previous draft of the proposal listed nuclear power as one of those highest-priority technologies, it was ditched after a backlash from some commissioners including Frans Timmermans and Margrethe Vestager, who feared the rules could be used to steamroller anti-nuclear opposition. In a compromise, the final text lists small modular nuclear reactors (a nascent technology) as a second-tier “net-zero technology,” which benefits from some of the permitting simplification.

Tectonic shift: Today’s laws, combined with the Chips Act and last week’s loosening of subsidy restrictions, mark a new era in the world economy, with the state playing a more leading role. Or, as our crack team of reporters describes the EU’s new climate plan: Don’t burn fossil fuels, set fire to your principles instead!

Take a step back: Europe’s new strategy of openly betting on specific technologies on which it will focus attention and money would have been unthinkable a few years ago — and is still heavily divisive even in the College of Commissioners. But the EU is following Washington’s lead on its Inflation Reduction Act and Chips Act, which similarly pick tech for investments and tax credits.

Take 2 steps back … and it’s clear the U.S. and EU are actually emulating Beijing. Its “Made in China 2025” strategy listed the same strategic sectors that the West is now focusing on, from microchips to renewable energy and electric cars. When Xi Jinping launched the plan eight years ago, politicians in the U.S. and EU first ridiculed and then decried it as interventionist and deeply flawed, arguing the state was notoriously bad at picking winning tech. They’re now copying his strategy — but only after giving China an almost decade-long head start.

**Join us next week, March 21, for a discussion about who should fund telecommunications infrastructures at POLITICO Live’s event “Telecoms drumbeat for the future of connectivity”, moderated by Mathieu Pollet, tech reporter at POLITICO. Register here.**


FOCUS ON BULGARIAN AMMO: Industry Commissioner Thierry Breton is eyeing factories in Bulgaria for a massive ramp-up of ammunition production to supply Ukraine. Speaking to Playbook from Bulgaria on Wednesday, Breton said it was time to move from plans to action, to identify the factories that could rapidly increase production, their needs and capacity, and to anticipate potential supply chain bottlenecks.

Speedy Thierry: “You know me, we need to be fast — so that’s what I’m doing. Last week [EU foreign affairs chief] Josep Borrell and I proposed this plan to increase production, and now I’m on the ground.” Breton said he visited three classified production sites — one of them was state-owned VMZ. “Bulgaria has a good capacity to significantly increase production, within a timeframe that may be compatible with what we are looking for,” Breton said. 

Reminder: POLITICO and our sister publication Welt previously reported on how ammunition from Bulgaria may have saved Ukraine as it withstood the Russian invasion, with Sofia reportedly supplying up to a third of Kyiv’s ammo. But Bulgaria has been in limbo since the pro-Western government of Prime Minister Kiril Petkov was forced to resign last June, with a new election due in a few weeks. Meanwhile, the country’s president, Rumen Radev, has been criticized for pro-Kremlin rhetoric.

Asked about potential risk of relying on a country with a notoriously Russia-friendly elite, Breton insisted he was encouraged by positive signals from Bulgaria’s acting government and wasn’t worried about the country’s reliability when it comes to refilling EU countries’ ammo stockpiles. But what about Radev’s pro-Russia stance? “I do not see any particular political risks,” Breton insisted. “The defense minister, who is very close to the current president, invited me on this visit today.”

Circular trade: Bulgarian firms “have the capacity to increase the shipments to their current clients, which are EU members,” Breton said. “The countries which have stockpiles will be able to give them to Ukraine, and the producers will be able to increase their production to refill those stocks. It was very important for me to have this guarantee.”

Thierry on tour: Breton will next travel to Slovakia, the Czech Republic, Poland, France and Romania as part of a “defense tour” of countries that have the potential to ramp up ammo production.

NOW READ THIS — ATTITUDES TO RUSSIA: Russia is widely seen as an “adversary” or “rival” by Europeans, according to a report by the European Council on Foreign Relations, to be published today and previewed by Playbook. The report, authored by Ivan Krastev and Mark Leonard, is underpinned by YouGov and Datapraxis polling conducted in the U.K., Denmark, Estonia, France, Germany, Italy, Poland, Portugal, Romania and Spain. The “adversary” stance was strongest in Denmark (82 percent), followed by Estonia and Poland (both 79 percent), Britain (77 percent), Germany (69 percent), Spain (65 percent), France (59 percent), Portugal (57 percent) and Italy (54 percent). In Romania, 44 percent said Russia is an adversary or rival.

Russia’s loss, EU’s gain: Some 40 percent of those polled consider Russia to be weaker now than before the full-scale invasion, versus 13 percent who see it as stronger. The EU, meanwhile, is seen as stronger than a year ago everywhere except Italy. The polling of 14,439 people was conducted in January.

MEANWHILE, IN BELGRADE: Serbia’s ultra-nationalists are using the Russian war to galvanize their campaign against Kosovo’s independence — and anti-war activists are getting caught in the crossfire, reports Bennett Murray.


HAPPENING TODAY — ENVIRONMENT COUNCIL: The EU’s environment ministers meet today for talks on heavy vehicle pollutant emission standards. Weighing heavy on proceedings: The German government’s threat to blow up already-agreed EU car emissions legislation at the last minute, to create a loophole for the continued sale of combustion engine cars after 2035 despite Brussels’ plans for a ban from that year.

Where will it stop? Diplomats are worried that the alliance Germany created to save Das Auto will today go further and also seek to water down emissions standards for trucks — and may in future loosen rules on particulate matter emissions (a main pollutant in cities, causing lung disease and millions of premature deaths). Indeed, some of the countries in Germany’s alliance (comprising the Czech Republic, Italy and Poland, among others), are interested in weakening these pollutant emissions standards. Can Germany put the genie back in the bottle?

Berlin’s demands: The German government sent a letter Wednesday to the European Commission, my colleagues Hans von der Burchard, Joshua Posaner and Giorgio Leali report, spelling out what it wants in return for lifting its blockade: loopholes for vehicles running only on e-fuels. Commission officials warned this amounted to reopening the legislation, a red line for the European Parliament and other EU countries.

METSOLA ASKED TO INTERVENE: Parliament President Roberta Metsola could today be tasked with speaking out against Germany’s last-minute intervention to save the internal combustion engine. Renew Europe group chief Stéphane Séjourné will put forward a vote among political leaders asking Metsola to write to the Council on behalf of her institution, urging it to unblock the file and honor its agreement with the Parliament.

EU credibility at risk: “This is a question of principle,” Séjourné told Playbook. “The European Parliament needs to flex its muscles. The Council has created this mess, it needs to fix it. This is a question of credibility for the EU.”

Traffic light coalition: Ironically, Séjourné expects the motion to pass today in Parliament’s Conference of Presidents, with the votes of Renew, the Greens and the S&D — much like the coalition which in Germany has agreed to push for loopholes that are now derailing the combustion engine ban.

BRETON TOLD YOU SO: Who saw the combustion engine fight coming last year? One Thierry Breton, who in an interview with Playbook in November warned about the implications for jobs and EU industry. Asked Wednesday whether he was a better defender of Berlin’s car industry than German Commission chief Ursula von der Leyen, Breton insisted he wasn’t weighing in on behalf of any national interest or industry. “I insisted that we should wait before pre-empting the decisions, because it is a very complicated subject and the Council still had to vote,” Breton told Playbook.

Early warning: What was true, Breton said, was that he warned early on about the “industrial implications” of the law. “Some wondered whether I was an unguided missile. Maybe I was not a loose cannon but was right with my warnings before others saw it coming. But that’s my job — to anticipate.” In other words: Told you so.

TOXIC GERMANITY: The resuscitation of Das Auto reveals a deeper problem: Berlin has become an obstructor in Brussels, rather than a constructive force. “The alchemy between Council, Parliament and Commission produces bona fide results that legitimize and sustain the EU,” writes my colleague Matt Karnitschnig in this must-read piece. “That Germany is willing to tinker with this delicate balance, betrays either ignorance in the current regime of how the EU works, ambivalence, or both.”

Where are the Greens? The Green party’s leaders Robert Habeck and Annalena Baerbock, who championed the combustion engine ban and are the most pro-European forces in the government, have been largely silent on the issue, Matt notes.


PANZERI KICKED OUT OF EX-MEPs CLUB: Pier Antonio Panzeri, the Italian ex-MEP at the center of a Qatar and Morocco corruption scandal in the European Parliament, will likely be dumped out of the Former Members Association, an official grouping of around 750 former parliamentarians, Eddy Wax writes in to report.

Ciao! The FMA will vote on booting Panzeri at its next general assembly on May 4, after the management committee decided to expel him. The FMA confirmed this would be the first and only time it has excluded an MEP.

Last supper: Panzeri was also member of the FMA’s management committee, but the organization stripped him of that role three days after the scandal broke last December. He was jointly in charge of organizing dinner debates.

**On March 21, Luca de Meo, CEO of Renault and chairman of ACEA will join our senior policy reporter Josh Posaner for an exclusive one-to-one interview. The interview takes place during POLITICO Live’s event “Made-in-Europe: How to keep up the fight in the electric car race?”. Interested in receiving the recording of the interview? Sign up today!*


D-DAY FOR MACRON: French President Emmanuel Macron will face a moment of reckoning today as lawmakers gear up for a final vote on his government’s deeply unpopular pension reform, which has sparked weeks of nationwide protests. Clea Caulcutt and Elisa Bertholomey explain what’s at stake and how it could all play out.

AGRI REVOLUTION IN DUTCH ELECTION: The farmer-friendly BoerBurgerBeweging (BBB) seemed to have landed a massive victory in the Dutch provincial election as exit polls were released late Wednesday night. The newcomer party could become the joint-largest bloc in the national senate, the make-up of which is dictated by the provinces.

It’s a major blow to the government of Mark Rutte and calls into question its ability to implement harsh policies planned to clamp down on nitrogen emissions from farms. “People, what the f*ck happened?” BBB leader Caroline van der Plas said in an address to the party faithful last night, according to Algemeen Dagblad. More on the Dutch crisis by Karl Mathiesen here.

HOW LOW WILL POLES GO? As Poland’s ruling Law and Justice seeks a third straight term in office in September’s parliamentary election — something no party has achieved before in the country’s democratic history — the question is how low will the warring camps go. POLITICO’s Jamie Dettmer has more.

IS RISHI SUNAK ACTUALLY … NOT BAD AT HIS JOB? My London colleagues consider that question.

SHOT: Washington has demanded that TikTok’s Chinese owners divest their stakes or face a possible ban in the States, the company told Reuters.

CHASER: The Brussels parliament has banned access to TikTok via all of its data networks — including the Wi-Fi for visitors, reports RTBF.


Environment Council at 9:30 a.m. Arrivals and doorsteps at 8:30 a.m.; press conference around 6:50 p.m. Environment Commissioner Virginijus Sinkevičius is expected to meet with Latvia’s Māris Sprindžuks and the Netherlands’ Vivianne Heijnen. Full agenda. Watch.

— Commission College meeting, followed by press conference. Watch.

— European Parliament’s Conference of Presidents 10 a.m.

— ­European Parliament plenary session continues in Strasbourg. Highlights: Debate on save the bees from 9 a.m. … Vote on poisoning of schoolgirls in Iran from noon (backgrounder here). Agenda. Watch.

— HRVP Josep Borrell and Commissioner Olivér Várhelyi in Albania for the EU-Albania Stabilization and Association Council; press conference at noon. Watch.

— Council President Charles Michel meets WTO Director General Ngozi Okonjo-Iweala at 9 a.m. … U.N. High Commissioner for Refugees Filippo Grandi at 10 a.m. … Director General of the International Atomic Energy Agency Rafael Grossi at 11 a.m.

— Press conference by President of the ECB Christine Lagarde at 2:45 p.m., following ECB Governing Council meeting in Frankfurt. Watch.

— Commission VP Maroš Šefčovič in Switzerland; press statement at 6:15 p.m. Watch.

— Commissioner Ylva Johansson in Serbia; visits Frontex officers deployed at the Hungarian border together with Serbian Minister for the Interior Bratislav Gašić and Frontex Executive Director Hans Leijtens. Watch recorded press statement.


SELMAYR EYES USA: Martin Selmayr — former Commission President Jean-Claude Juncker’s one-time all-powerful chief of staff and ex-secretary-general of the Commission, aka the “monster” of the Berlaymont — has been shortlisted to become the EU’s next head of delegation to Washington, as well as to the EU delegation to the U.N., two officials told my colleague Jacopo Barigazzi. But they added the shortlisting did not mean Selmayr is a shoo-in.

FREE TRAIN TRAVEL: Applications for DiscoverEU — the EU project that gives youths free travel passes around Europe — are open until noon, March 29. Applicants must be 18 and reside in the EU or an Erasmus+ country.

BIN STRIKE: It’s not just Paris — trash is piling up around Brussels too, reports Le Soir. Some garbage collectors are striking in response to announced night waste collections as of May 15.

BIKE THEFT CRACKDOWN: Belgium is setting up a central register to help fight bicycle theft. People will be able to order a sticker with a unique code which will allow them to register their bikes and flag thefts. Would-be purchasers of second-hand bikes can scan the stickers to check if they’ve been reported stolen. A similar system that’s in place in Brussels will be integrated into the new national one. Details here.

EXHIBITION — MICHEL FRANÇOIS: A new exhibition of Belgian artist Michel François — featuring sculptures, photographs, videos, paintings and installations — opens today at Bozar.

BIRTHDAYS: MEP Saskia Bricmont; NATO chief Jens Stoltenberg turns 64; Former Bank of England Governor Mark Carney turns 58; POLITICO’s Cristina Gallardo; U.K. Labour Party Chairwoman (and former MEP) Anneliese Dodds; European Commission’s former Secretary-General Alexander Italianer; Matteo Mirolo from Transport & Environment; Alibaba’s Group Claudia Vernotti; IBM’s Zachery Bishop; Riccardo Reati of Strategy & Transformation.

THANKS to Federica Di Sario, Jacopo Barigazzi, Eddy Wax, Karl Mathiesen, Playbook reporter Ketrin Jochecová and producer Grace Stranger.

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Jakob Hanke Vela

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